3708 S Terry Ave Ave #110

Sioux Falls, SD 57106

$95,000D

2 bd · 1.0 ba · 768 sqft · Built 1977 · Condo · Active · 43 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,093/mo
• Mortgage (P&I): −$498
• Tax + insurance: −$158
• HOA: −$387
• Vac / Maint / Mgmt: −$229
• Net cashflow: $-180/mo
• Annual: $-2,165/yr
• Cap rate: 4.01%
• Cash-on-cash: -8.14%
• DSCR: 0.64
• 1% rule: 1.15%
• Cash to close: $26,600

Investor read

• This is a 2-bed/1.0-bath condo listed at $95k. Condition is rated good.
• At list price, monthly cash flow is $-180 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $69k (27.5% below list).
• Meets the 1% rule at list price ($1k rent vs $95k).
• It's been on market 43 days — a 3% lower offer ($92k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $69k (27.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $657 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#3 in SD, #610 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime F.
• Sioux Falls School District 49-5 (urban): math 39% / reading 48% proficiency, ranked #45 of 59 in SD (top 76%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Oscar Howe Elementary - 58 (math 49% / reading 48%, grade D, #132 of 253 statewide, top 52%, 586 students, 42% FRL); Roosevelt High School - 03 (math 40% / reading 60%, grade D+, #67 of 151 statewide, top 45%, 1,713 students, 28% FRL) — zoned schools at 35% FRL track the district average.
• Watch-outs: HOA is 35% of rent.
• Market conditions: Rents rising (+2.2%/yr); 393 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 2,425 units permitted in Minnehaha County in 2024 (1,367 in 5+ unit buildings).
• Minnehaha County population projected at +46% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 4.0% vs local median 2.6% in Sioux Falls — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• This rent is only 17% of the median local income ($78k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 43 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Built in 1977 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?